Managing in an Economy of Emotion, Not Reason (Part 2)

The previous column made this case: Great organizations reduce alarming levels of customer churn by engaging the emotions of their customers and the emotions of the employees who cultivate bonds with those customers.

Contrary to popular belief, we're not trying to win business in an economy of reason -- an economy in which all employees and customers are treated like mercenaries, driven solely by pecuniary gain. Great organizations know we are competing in an emotional economy -- an economy grounded in human interactions and connections.

How do great organizations compete and win in an emotional economy? How do they build sustainable growth? What do they know that others don't?

Those organizations and their enlightened managers know which questions to ask first, namely: Are employees cast in roles according to their talents? Are they working with great managers? Are they creating customer engagement?

Let's consider these three questions more closely.

Question 1: Are your employees cast in roles according to their talents?

Since 2000, Gallup has reviewed the responses of more than 3 million employees who have participated in the Q¹² survey, Gallup's 12-item assessment of employee engagement. The research reveals that across sectors and around the world, three out of every four employees believe that they are not currently in roles that suit their talents. When a person is miscast, the chances of superior performance are extremely remote. Remember when basketball legend Michael Jordan tried to play professional baseball? He proved to be an adequate performer at best. Surely, he was no superstar. Now think about this from your organization's standpoint. What if 75% of your players are as miscast as Jordan was on the baseball diamond?

It's important to note that employees are miscast at all levels, suggesting that leaders are as likely to be in the wrong roles as entry-level employees are. A miscast leader is extremely unlikely to provide his or her organization with solid strategy and insights. And few companies can afford this in an era in which mistakes can be can fatal.

Question 2: Are your employees working with great managers?

Even the right person in the right role won't be fully productive if he or she isn't paired with a great manager. A great manager is the catalyst for the creation of a great team. In fact, Gallup research shows that people join companies but leave managers. Often when companies are committed to "satisfying employees," their top management and human resources departments will take actions and create interventions designed to aid this endeavor. The problem is, these actions will have little impact if they are far removed from the very moments that create or destroy engagement.

Consider employee recognition. Most companies believe that it's important to recognize employees for doing a good job. Gallup research agrees, provided the recognition program meets some important guidelines. As Curt Coffman, Gallup's global practice leader for employee and customer engagement, notes, the best recognition is "local, real-time, close to the action, and sincere. And most importantly, it relates directly to the desired outcomes -- because that tells the employee that her work matters to the company, to customers, and to her fellow employees." (See "Driving Performance in the Emotional Economy" in See Also.)

In this context, let's look at two employee recognition efforts to see how they failed to support employee engagement. In both companies, scores on the Q¹² item that relates to recognition were extremely low. In one company, management created a companywide "recognition day" that honored the "employees of the quarter." The problem with this program was that the awards were exclusive, and they honored subjective achievements. As a result, a majority of the employees felt left out.

The second company created monthly department-level awards, but no clear award parameters were decided. So the program quickly devolved into a "who-gets-the-next-award?" game. Needless to say, this wasn't terribly effective either.

Often, a great front-line manager can do more to engage and motivate employees than any recognition and awards programs ever will. For example, a mid-level manager in a manufacturing company in India used to gather his team members together twice a week. He'd then ask the question, "What haven't we applauded today?" His aim was to focus on small achievements that didn't qualify for the company's award and recognition program but meant a lot to those who accomplished them. Not surprisingly, the members of this team felt appreciated; they continually tried to perform actions worthy of recognition.

When considering employee performance, it's fascinating to observe the range of engagement levels that exists from team to team within the same company. Some of the most engaged -- and the least engaged -- workgroups that Gallup has seen can be found within the same organization. And this enormous range in engagement levels has a huge economic impact on a company.

Who is responsible for creating -- and correcting -- this range of employee engagement? The individual manager makes all the difference. Managers create the lens through which their team members view their roles and the organization as a whole.

Question 3: Are your employees creating customer engagement?

If you've successfully answered questions 1 and 2 above, you've taken the first vital steps toward creating customer engagement. You now have the right people in the right roles, and they're working with a great manager on a great team. Once these two key elements are in place, your employees are more likely to forge bonds with their customers. If you've failed to meet these two challenges, the chances that your employees will build customer engagement are, at best, remote.

A classic example of this principle in practice comes from Gallup's study of call center representatives and their impact on customer engagement. In one large call center, customer service representatives were recruited using a standardized process; they possessed similar qualifications and received the same orientation and training. And yet, research revealed that the top 5% of reps, on average, delighted 71% of their customers while the bottom 5%, on average, alienated 31% of theirs. What's more, the best seven reps engaged 100% of the customers with whom they interacted; the bottom three reps drove away every customer who talked with them. (See "Measuring the Right Stuff" in See Also.)

The key to building customer engagement and creating sustainable growth for this company -- or for any organization -- is finding more customer service reps who have the talents to build customer engagement every time they speak with customers. And the key to keeping them engaged is to pair them with great managers as part of a great team.

It all comes back to the same question: What is the key to success in the emotional economy? The answer is that engaging customers' and employees' emotions is the only way for organizations to flourish.